BR urges ADB to extend rail dev project by four years

Bangladesh Railway (BR) has requested Asian Development Bank (ADB) to extend the period of US$ 430 million railway development project by four years as it has failed to meet the scheme's main condition of reform that has reportedly put the release of funds on hold. The government and the ADB signed the US$ 430 million loan agreement in February 2007 based on which the multilateral financier released $130 million in the first year to carry out the initial reform work including study. But the ADB stopped disbursement of the rest amount of the loan commitment in 2008 as the BR could not design Line of Business (LOB) and its organogram on time as per the agreement on the first instalment. As per the loan agreement, the ADB was supposed to release $150 million in 2008, $100 million in 2009 and $50 million in 2010 to complete the project by June 2011. Officials said the BR has sent the letter containing the request to the Economic Relations Division (ERD) through the communications ministry showing the grounds of delay in the reform process and suggested extension of the period upto 2015. "Although we could not bring about desirable reform in the railway during the last four years, we have done a major work on the LOB, recruitment and financial delegation power in those years," said a senior official. He said the reform of the BR could not be done on time due to change in the government and the following changes in the government's system. After the loan agreement, the BR had to wait for more than one year to get the reform proposal from the consultancy firm, which was awarded the work. The officials said although the steering committee, comprising the rail and road division secretary and the finance secretary as per the reform plan, approved the consultancy firm-proposed structure along with the organogram, it was put on hold for review by the cabinet in accordance with the rules of business on December 5, 2009. Since then the reform process has passed through many changes, said an official preferring anonymity. The reform process also ground to a halt after the Prime Minister announced making the railway a separate ministry, which, however, ended up with the formation of a railway division separate from the rail and road division.